BUSINESS
How Can Engineers Reduce the Risk of a Claim? It’s important to be ready for clients’ accusations, whether legitimate or groundless. By Aun Japanwala and Tasmeea Islam
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3. A client names you in a lawsuit. When a budget is at stake, clients can become aggressive. Whether or not you’re at fault, they may look to pass financial responsibility onto you if an error or omission loses them money. And even if a claim is frivolous, you’ll still have to defend to clear your name.
ngineering projects can be complex and challenging to manage. Whether you're designing a small storefront or a new transportation hub, the pressure is high, as is the potential for errors. And when errors arise, regardless of who’s at fault, today’s society is quick to point the finger. Accusations of negligence or malpractice can cost a lot to defend against—and tarnish your reputation and credibility.
1. A client claims you made a mistake. According to claims data from Victor Insurance, 52% of claims are caused by design errors. With so many different measurements and models, it’s easy to slip up, no matter how careful or precise you are. When you’re juggling multiple projects, it’s near-impossible to detect every single error before submitting the final plans, even if you’re double- or triple-checking your calculations. 2. A client accuses you of negligence. Engineering projects rarely go smoothly. Sudden disruptions in performance, schedule and pricing may be unaccounted for under the existing terms of the contract. If a client isn't aware of delays or cost overruns well in advance, you might be accused of negligence or breach of professional duty. 16
CANADIAN CONSULTING ENGINEER
52% of claims are caused by design errors, according to Victor Insurance.
1. Practise good contract management. Set clear expectations regarding the project, including the terms and conditions; the timing, delivery and termination of services; and the pricing and payment schedules. Seek legal counsel if necessary. Make sure you understand your legal obligations and amend your contracts as needed for adequate protection. 2. Ensure you have the contractual ability to stop working if you’re not being paid. This is key just in case your project gets held up. Additionally, all invoices should state they are subject to the terms of the master agreement. 3. Implement quality control processes. Review your work constantly and keep a list of active clients to make sure you don’t bite off more than you can chew. March/April 2022
I M AG E COU RT E SY PROL I N K.
Understanding the risks The following are the top three risks faced by engineers:
Managing the risks Here are some tips and tricks to help you avoid a claim:
